Retrofit and Renovation Can Mean Big Opportunities

By Ellen Rogers

They say the numbers don’t lie, so co consider these:
• U.S. commercial buildings consume more than $120 billion in annual energy costs. That’s according to the 2012 Commercial Buildings Energy Consumption Survey released in 2016 (Note: The 2012 study is the most recent edition; the 2018 survey is due out late in the summer of 2020).
• The U.S. Energy Information Administration reports that in 2018, the residential and commercial sectors accounted for about 40% (or about 40 quadrillion British thermal units) of total U.S. energy consumption.
• According to the research division of Key Media & Research (parent company of USGlass magazine), of an estimated 6.4 million existing nonresidential buildings in the U.S., less than a quarter have low-E glazing—and that includes buildings that have already been retrofitted. Additionally, roughly a third of existing nonresidential buildings still have single glazing as their primary glass makeup. Again, that includes replacements.

If it’s true, what they say about the numbers, the U.S. glazing industry is standing before a big opportunity.

“The commercial building sector in particular remains dominated by aging buildings with substandard windows and facade systems—systems that have been in service far longer than anticipated by the original designer,” says Mic Patterson, ambassador of innovation and collaboration with the Facades Tectonic Institute, pointing out that renovating and repurposing older buildings represents a more sustainable strategy than demolition and replacement. “The potent messages of embodied carbon, combined with the time-value of carbon, tell us that we should be doing as little building as possible, especially new construction. In addition, there is increasing recognition of the role of the building skin in providing a healthy and productive interior environment.”

Improving the energy performance of existing buildings can save billions of dollars, creating a more comfortable environment for occupants, and reducing the building’s environmental impact. It can also mean business for the glazing industry. The challenge, however, is getting those existing buildings to the same, or better, performance levels as new construction—and getting the owners to do it.

Where Are We Now?

The COVID-19 pandemic has left everyone searching for the new normal. The current state of the world economy, combined with the American Institute of Architects’ historically low Architectural Billings Index score of 29.5 (scores above 50 indicate growth), could be signs that new commercial construction will remain low for some time. However, there are indicators pointing to growth potential in renovation work for the glazing industry,
such as stimulus funding for building retrofits and improvements. And the market is ripe with reasons why the time is now for replacement.

“Without question, the largest energy usage and energy waste to both heat and cool, occurs in the windows/fenestration of older buildings, followed by challenges in sound attenuation, especially in crowded city locations—both have an impact on tenant comfort,” says Arthur Berkowitz, president of Renovate by Berkowitz. “Typically, the new construction and retrofit markets are cyclical. If the expected softness occurs in new construction starts, then the expectation for the glass industry is to focus on the uptick in rehab opportunities. Estimates for commercial buildings that are currently single-glazed, typically clear glass, and constructed in the 1950s, 1960s, and early 1970s (before the 1973 oil crisis) approach a 1 billion square foot market opportunity for upgrading the building envelope/windows.”

Kevin Robbins, director of Apogee Renovation (a part of Apogee Enterprises), says there are a number of key problems with older buildings that impact energy performance and efficiency.

“Buildings older than the early 1980s don’t have low-E glass. Insulating glass was introduced in the mid-1970s. These buildings have very poor energy efficiency,” he says. “Additionally, these buildings’ windows are near the end of their lifespan due to aging insulating glass and frame seal failures.”

But It’s Not So Simple

If renovating commercial buildings with high-performance fenestration can improve energy use and expenses, why don’t more owners do it? While there certainly can be cost restraints, the retrofit process can also be complex and disruptive to the building and its occupants. As a result, owners often look for what might be perceived as a simpler fix.

“The mechanical, HVAC and lighting systems are the low-hanging fruit and many building renovations stop there. The big energy payoff is found in what is often referred to as deep energy retrofits,” says Patterson. “The problem here is short-term building economics: replacing mechanical and lighting systems is easy to implement and relatively inexpensive with a quick payback. Façade retrofits are more costly and invasive and are often
far more challenging to implement and manage. The biggest barrier to the opportunity of widespread facade system renovation is not the replacement or retrofit costs.

It’s the cost and risk resulting from the disruption to ongoing building operations, the costs associated with mitigating that disruption in a manner to reduce the risk to the building owner. Not many building owners can afford to temporarily relocate tenants for the two to three year duration of a facade renovation of a large urban building. So, a lot of expense goes into design, delivery and installation strategy and logistics to minimize that disruption while the building remains occupied.”

Anas Al Kassas, founder and CEO of Inovues Inc. in Houston, points out several retrofit obstacles.

“Owners always think full replacement— they don’t even consider the windows first, rather the HVAC,” says Al Kassas. “But if the building envelope and particularly the windows are leaky or thermally inefficient, no matter how good the HVAC, the building will continue to lose energy.”

He says traditional processes are intrusive and require disruption to the building.

“Plus, the payback period can be up to 75 years. It’s the savings vs. cost so few buildings are able to do that. The challenge is having a solution that offers energy-and non-energy-related benefits and a payback within the same range of other systems …”

Robbins adds, “Window tear outs are expensive. There’s potential for abatement of hazardous materials to consider. Sequencing is always a concern. Owners understand their occupants will be affected and scheduling considerations are a priority to minimize disruption.”

I’ll Just Change the Glass

Another challenge the glazing industry sometimes encounters is misunderstanding what needs to be done in order to improve the energy performance of the façade. Some owners might think, for example, they can simply change out the poor-performing, single-pane glass for insulating glass and that will address the issue. This couldn’t be farther from reality. Patterson points to one renovation project in which owners wanted to keep as much of the original system as possible to reduce costs.

“What they found was that partial replacement—just replacing the glass and refinishing the existing metal—was more expensive than a complete façade replacement,” he says. “In extensive survey work done at the University of Southern California School of Architecture involving over 600 building renovations, the majority of  the curtainwall buildings included in the survey involved the complete replacement of the façade system, essentially because it was the only available option. A product that does not accommodate the extension of its service life through repair, maintenance and renovation is a poorly designed product. The sad reality is that curtainwall and window wall system designs fail to anticipate the need for future maintenance and renovation; this is as true today as it was
in the early days of their application in the mid-twentieth century. We are, quite literally, building tomorrow’s problems today.”

Fortunately, there are plenty of façade upgrade options. These include high performance, low-E coated glass and framing combinations, along with details such as warm-edge spacers and thermal breaks.

“We want to help the owner understand what’s most effective in their environment,” says Robbins. “Are you looking for a certain aesthetic? More visible light in the building? Can we incorporate an upgrade to downsize the HVAC? New windows and high performance glass help reduce the tonnage to lower the cost of a future HVAC upgrade.”

As an alternative to a full façade replacement, some companies have developed other solutions. These allow the building to maintain the original glazing systems, while incorporating new elements to increase the energy performance.

“Historically, the solution to inefficient, drafty windows, was to rip out and re-glaze with a complete new window system, glass and framing,” says Berkowitz. “This is very expensive, disruptive to existing tenants, and in cases such as landmark or historic applications, simple logistics and access to existing fenestration systems isn’t an option.”

He continues, “Previous retrofit systems, such as film or modified storm window applications, are either unsightly, inefficient, require maintenance, or all of the above. Our solution offers a true, hermetically sealed upgrade to a double or triple glazed systems, no maintenance, and in many cases, improved optics versus filming.”

Al Kassas says his company also has a non-intrusive solution, which enables windows of existing buildings to be retrofitted without having to remove/replace/alter the existing component. The company’s Glazing Shields are securely mounted onto the original glass from the outside or inside, creating a multi-pane insulating glass unit using a non-intrusive attachment mechanism.

But even these systems come at a cost that can be challenging for owners to accept. Berkowitz says while his systems typically cost half that of traditional retrofits, “it’s still a significant capital investment, and simple return on investment studies typically show a five to seven year payback. It’s ‘simple’ because it ignores, the long-term benefits of tenant comfort and tenant retention, increased value of the building, LEED certification opportunities, and, ultimately, keeping a building competitive with new construction projects.”

Al Kassas agrees that cost can be a challenge, but it’s not the only one.

“There’s often no incentive for owners unless they’re forced to do so,” he says.

To overcome some of these challenges, Al Kassas suggests more communication with the building owners.

“One thing the industry can do is talk to building owners directly about the impact of retrofit/renovation. Often they just don’t know or are more focused on other systems. [The industry can help them] develop a comprehensive payback analysis … these are important points that can drive interest from the owner.”

Opportunities Ahead

Retrofitting the envelope can provide benefits beyond energy performance. Al Kassas says improving the aesthetics, for example, can help reposition the building in the market.

“That could make owners more interested in upgrading the envelope, façade/windows, and could extend the life of the existing building by about 25 years,” he says.

Robbins adds, “Owners most often think about savings in terms of a simple payback. We point them toward other things they can realize such as increasing the value of the building to improve the occupant comfort and the potential to increase lease rates. In the case of office buildings, studies show that occupants in an uncomfortable environment will be less productive.”

Cities, states and other jurisdictions are also continuing to adopt and enforce
increasingly stringent energy codes, and turning to benchmarking to prove the performance levels. According to the Department of Energy Office of Energy Efficiency and Renewable Energy, “Benchmarking is the practice of comparing the measured performance of a device, process, facility, or organization to itself, its peers, or established norms, with the goal of informing and motivating performance improvement. When applied to building energy use, benchmarking serves as a mechanism to measure energy performance of a single building over time, relative to other similar buildings, or to modeled simulations of a reference building built to a specific standard (such as an energy code).”

Cities across the country are calling for benchmarking of commercial buildings, and if they don’t measure up, there could be consequences. Robbins says the move toward benchmarking represents an opportunity for the glazing industry to work with owners in these cities.

“Many major cities are energy benchmarking … calling for owners of certain size buildings to report their energy consumption and cost. In New York, for example, owners who don’t comply with the latest energy savings rules will be fined. Those ever-increasing benchmarking requirements are an opportunity for window and glass manufacturers and installers to assist owners with the compliance needs.”

The retrofit and renovation market represents a significant opportunity for the glazing industry. Given the number of existing buildings with single-pane glass alone, there’s huge potential to not only improve energy performance, but to also keep the industry busy. However, unless mandated to do so, what will it take for the owners to buy in? Glass companies that step up to the challenge are the ones that will likely draw the winning numbers.

Ellen Rogers is the editor of USGlass magazine. Follow her on Twitter @USGlass and like USGlass on Facebook to receive updates.

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